Financial Foot In Mouth » Uncategorised

Legendary Investors Know Their Limitations – Why Not Others?

admin — Mon, 23 Apr 2012 10:46:38 +0000

Soros is not alone in his humility. John Maynard Keynes also observed that the only justified answer to many questions about the future is “We simply do not know” – but nobody is rewarded for saying that. As John Kay has said, many people in the financial services sector profess knowledge of the future they do not have, and cannot have.

“For economic forecasters, as for other financial pundits, it is better to be conventionally wrong than unconventionally right.”

So, if real experts can recognise their own potential fallibility, why are there still so many (less justified) experts who cannot see past their own self importance? Worse still, why are there so many investors willing to believe their pronouncements? Beats me.

The Futility of Forecasts – More Views from Economics Experts

admin — Thu, 19 Apr 2012 09:15:04 +0000

Couldn`t have said it better! These views were echoed by the eminent Professor John Kay in his interview on “Jeff Randall” this week. The future is always different and can seldom be extrapolated from the present.

A Very Wise Man

admin — Fri, 06 Apr 2012 13:08:59 +0000

Quod erat demonstrandum

At Least One Journalist Talking Sense

admin — Mon, 26 Mar 2012 10:10:15 +0000

Damian Reece, in last Saturday`s “Daily Telegraph”, broke ranks from the journalistic vacuity of many of his peers who trot out futile predictions to ask, “what, then, is the point of forecasters?”. In an intelligently written article, he drew attention (courtesy of M&G`s Anthony Doyle and Bank of America Merrill Lynch) to the failure of the Bank of England to provide any meaningful forecasts for U.K. inflation, going on to say, “The danger is that the Bank`s doom-laden words, simply because things are uncertain and by definition risky, affects broader thinking in the economy and contributes to an unwillingness to invest, for instance.” A parallel situation of course exists with many of our well-remunerated active fund managers, whose momentum investing promotes volatility and invariably deters ordinary investors from taking decisions that are in their best interests – that being to invest gradually into index-tracking funds.